Bloomberg reports on the news that Treasury Secretary and Tax Cheat Tim Geithner has delayed until tomorrow the announcement of the 'TARP II' request. White House Economics Director Summers says that they've pushed it off because they don't want any distractions from the cloture vote today on the Obama-Reid-Pelosi debt spending bill. Summers is right about one thing: if the administration announced today it was getting ready to plow another trillion dollars into the banking system, Senators might not be so eager to spend a trillion more on pork-barrel projects:
President Barack Obama’s struggle to push an economic stimulus bill through Congress may seem easy compared to what he’ll encounter when he returns to Capitol Hill for additional funds to rescue the banking system.
Obama will likely need to ask Congress for more money to recapitalize banks, as much as $1 trillion on top of the roughly $300 billion remaining in the current Troubled Asset Relief Program, according to an estimate by former Federal Reserve economist Ward McCarthy. That will be an even tougher sell for the new president than the stimulus plan, which is headed for a Senate vote this week after passing the House with no Republican support...
Geithner’s speech has been pushed back one day to Feb. 10 to avoid distracting attention from the economic-stimulus bill, White House economics director Lawrence Summers said today. That is the same day the Senate is scheduled to vote on the bill.
“There’s a desire to keep the focus right now on the economic recovery program, which is so very, very important,” Summers said today on ABC’s “This Week.”
While Bloomberg cites a figure of $1 trillion, there doesn't seem to be any real consensus on what Geithner will propose tomorrow. Senator Schumer has previously said that he anticipates the ultimate cost of TARP II may be as much as $3-$4 trillion. Apparently the Obama administration is going to great lengths to make sure Senators have no idea of the TARP request when they vote on the stimulus bill. That doesn't show much confidence about the public reaction.
Obama promised us openness, and this move is awfully transparent.